hindrances, and whether they shall hereafter insure a certain
approximation to the general state which a perfectly free
competition would insure or whether the economic condition of
the world shall be permitted to drift far from that normal
state, depends on the success which governments will have in
reducing or removing the hindrances.

[2] In this treatise the term _profits_ will be used to
designate the net increase which may remain in employers'
hands after paying the wages of labor of every kind and
interest on all capital used. The term _gross profits_
describes a sum made up of this net profit and interest on
the capital.

_Standards of Wages and Interest._--This accurate correspondence
between men's incomes and their contributions to the general earnings
of society would exist only in the absence of certain changes and
disturbances which it will be our aim, in the latter part of this
work, to study. These changes give to society the quality that we
shall term _dynamic_, and we shall examine them at length. What can,
however, be asserted in advance is that the rates of wages and
interest which would prevail if the changes and disturbances were
entirely absent constitute standards toward which, in spite of all the
changes that are going on, actual wages and interest are continually
tending. How nearly in practice the earnings of labor and capital
approximate the ideal rates which perfect competition would establish
is a question which it is not necessary at this point to raise. We
have to define the standard rates and show that fundamental forces
impel the actual rates toward them. The waters of a pond have an ideal
level toward which they tend under the action of gravity; and though a
gale were to force them to one end of the pond and cause the surface
there to stand much higher than the surface at the other end, the
standard level would be unaffected and the steady force of gravity
would all the while be drawing the actual surface toward it. In our
study of Economic Dynamics we shall encounter influences which act
like the gale in the illustration, but at present we are studying what
is more akin to gravity--a fundamental and steady force drawing wages
and interest toward certain definable levels. In our present study of
Economic Statics we must seek to discover how these standards are
fixed, in the midst of the overturnings which industrial society
undergoes.